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Cuts bite smaller organisations harder

26 July 2012

Dan Parton says the news this week that learning disability advocacy organisation People First Lambeth is closing isindicative of a worrying trend among service providers:

People First Lambeth had closure forced upon it when Lambeth Council decided not to renew any of its contracts with them when they expire in April - worth about £115,000 per year and 90% of its income. No organisation can cope with such a loss of income, so closure was inevitable.

Lambeth Council says that People First Lambeth's service users will be signposted to other supportproviders in the area.

People First Lambeth is not the first organisation to suffer this fate - and it will by no means be the last either. For example, charity consultancy and think-tank New Philanthropy Capital has already identified several charities it believes will go under in 2011.

This is where the government's cutsreally start to bite - and bite hard. Commissioners, faced withswingeing budget cuts are now making some very difficult decisionsabout which charities and providers will still receive funding andcontracts. Inevitably, there will be some that do not get theircontracts renewed and as a result will close.

While the biggernational charities and social care organisations will carry on -they have the scale and diversity of income to be able to absorbthe hit of losing a local authority contract - it is the smaller,local organisations that will come under most pressure.

Manyorganisations like People First Lambeth have the majority of theirwork come from local authority contracts. Take that away and theyhave almost nothing.

It is a situation where there are no winners:service users lose services that they may rely on and theuncertainty and upheaval of having to change to another providercan be distressing. Employees lose their jobs, which can seriouslyimpact on their own lives, especially with other jobs hard to comeby.

It could also mean that experienced workers are lost to theprofession, if they cannot find another job.

It also seems to goagainst the personalisation agenda, which was meant to give serviceusers more choice about the services they use.

But this is howthings are now, and will be until such time as local authoritybudgets start to rise again - and that won't be any time soon.Sadly, hard times are ahead.